Nearly everything is going right these days for Eli Lilly (NYSE: LLY). Sales and profits have been soaring. So has the share price, jumping more than 50% year to date after a 59% gain in 2023. Lilly now ranks as the biggest healthcare company in the world. The drugmaker has more room to grow, with its obesity drug Zepbound and a U.S. approval for Alzheimer’s disease drug donanemab likely on the way.
But is Eli Lilly the best biopharma stock to buy right now? Nope. I think investors should buy another magnificent biotech stock instead.
Not exactly David vs. Goliath
Which stock do I have in mind? Vertex Pharmaceuticals (NASDAQ: VRTX). However, we’re not talking about a David-versus-Goliath kind of matchup between Vertex and Lilly.
Sure, Vertex is much smaller than Lilly, with the latter’s massive market cap at over $840 billion. But it’s by no means small: Vertex’s market cap tops $120 billion, making it one of the world’s largest drugmakers.
Its stock performance hasn’t been too shabby either. It’s beating the S&P 500 so far in 2024, after jumping nearly 41% last year.
One nice plus for Vertex is that it enjoys a monopoly in treating the underlying cause of the rare genetic disease cystic fibrosis (CF). All four approved therapies that fit the bill are marketed by Vertex, including its super-successful Trikafta/Kaftrio.
Vertex’s massive opportunities
I like Eli Lilly’s growth prospects; obesity, type 2 diabetes, and Alzheimer’s disease present especially lucrative opportunities for the biopharma giant. But Vertex has massive opportunities too.
The company could have its most powerful and profitable CF therapy to date on the way to market. Vertex is awaiting U.S. and European Union approvals for its vanzacaftor triple-drug combo, which targets CF.
Meanwhile, the commercial launch of Casgevy, as a one-time functional cure for sickle cell disease and transfusion-dependent beta-thalassemia, is ramping up. The gene-editing therapy seems likely to become another blockbuster drug for Vertex.
Don’t think Vertex is limiting itself to rare diseases. It expects to soon complete a…
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